The European Bank for Reconstruction and Development Wednesday said it will lend $75 million to help Kazakh companies use energy more efficiently.
The loans will be provided through local Kazakh banks, which face repayments of $10.6 billion in foreign debt next year and have found it difficult to find funding for new lending. The Kazakh government is injecting $4 billion in new capital into major Kazakh banks.
"The framework represents a ... bold move ... which will benefit local banks as well as local producers and, eventually, consumers," said Olivier Descamps, the EBRD's business group director for central Asia. "It comes especially timely when it will also serve as a welcome stimulus to lending activities of banks in Kazakhstan."
The first loans totaling $10 million will be made through Bank Center Credit, the sixth largest bank in Kazakhstan.
According to the government, Kazakhstan uses 10 times as much energy to produce a percentage point of gross domestic product than developed economies. An average of 15% of the electricity generated in Kazakhstan is lost before it reaches consumers due to the widespread deterioration of the country's power infrastructure. The government estimates that the equivalent of more than 60 million metric tons of coals annually could be saved through higher energy efficiency.